Eboni Williams v. Gerald Shapiro

At a glance

Parties

Eboni Williams, Debbie Shoemaker, Paula Mays, Tina Kovelesky and Shadrin Herring (as class representatives and on behalf of the A360, Inc. Profit Sharing Plan, f.k.a. A360, Inc. Employee Stock Ownership Plan) v. Gerald Shapiro, Scott Brinkley, Argent Trust Company and A360 Holdings LLC

Case no.

Eleventh Circuit No. 24-11192 (appeal from N.D. Ga. No. 1:23-cv-03236-VMC)

Court

United States Court of Appeals for the Eleventh Circuit

Forum and rules

US federal court; Federal Arbitration Act, 9 U.S.C. § 16(a)(1)(C) interlocutory appeal; ERISA

Treaty

Plan document arbitration clause ("ERISA Arbitration and Class Action Waiver"), third and fourth plan amendments

Court

Judges Jordan (author) and Newsom, Circuit Judges; Charlene Edwards Honeywell, District Judge (M.D. Fla., sitting by designation)

Sector

Employee retirement plans; employee stock ownership plan

Outcome

Affirmed (15 December 2025): the plan's Arbitration Procedure is invalid under the effective vindication doctrine and the motion to compel arbitration was rightly denied.

Amount

Plaintiffs alleged the plan lost $35.4 million when its A360 shares were sold for about $34.6 million although worth about $70 million. No amount was decided on appeal.

The dispute

A360, Inc., created by Gerald Shapiro in November 2016, set up an employee stock ownership plan that bought 1,000,000 A360 shares for $30 million in January 2017. In September 2019, A360 and the trustee Argent Trust Company sold the plan's shares to A360 Holdings, LLC for about $34.6 million. At the same time A360 amended the plan to add an individual-arbitration clause that barred representative claims and any relief benefiting anyone other than the individual claimant; five days later it terminated the plan. Plan participants sued under ERISA for prohibited transactions and breaches of fiduciary duty, seeking plan-wide relief, disgorgement, restitution, rescission of the sale and reformation of the plan. The defendants moved to compel arbitration and argued that the effective vindication doctrine is mere dicta, that participants' rights are limited to their individual accounts, and that participation in the plan amounted to assent to arbitrate.

Key holdings

1. The Eleventh Circuit adopts and applies the effective vindication doctrine. The Supreme Court's discussion of it in Italian Colors is not mere dicta, and even Supreme Court dicta is not to be lightly cast aside. pp. 9–12
2. Claims under 29 U.S.C. §§ 1109(a) and 1132(a)(2) are brought in a representative capacity on behalf of the plan as a whole and provide plan-wide relief. That is a substantive statutory right, not a claim-joinder device. pp. 13–16 & n. 4
3. The Arbitration Procedure bars representative claims and any relief benefiting others. It therefore prospectively waives ERISA statutory rights and is unenforceable. The fourth amendment, which allowed some injunctive relief, does not cure this because it still excludes plan-wide disgorgement and restitution. p. 17
4. Thole v. U.S. Bank does not help the defendants. Thole concerned a defined benefit plan and Article III standing, and did not hold that a § 1132(a)(2) claimant cannot act as the plan's representative. pp. 16–17
5. Under Georgia law severability turns on the parties' intent. The clause's own terms make the entire Arbitration Procedure null and void if these requirements are invalid, so the whole procedure falls. pp. 17–18
6. The court did not need to decide whether the individual plaintiffs assented to the third and fourth amendments. It also held that Lindo (public policy at the award-enforcement stage under the New York Convention) does not govern this domestic ERISA case. p. 18 n. 5; p. 12 n. 2

Procedural history

1. January 2017The plan buys 1,000,000 A360 shares for $30 million.
2. September 2019The plan's shares are sold to A360 Holdings, LLC for about $34.6 million, and the arbitration clause (third amendment) is added. The plan is terminated five days later.
3. September 2022Plan participants file an ERISA class action in federal district court.
4. 2024District court (N.D. Ga.) denies the motion to compel arbitration and holds the Arbitration Procedure unenforceable and non-severable (Williams v. Shapiro, 724 F. Supp. 3d 1295).
5. 15 December 2025Eleventh Circuit affirms.

Tribunal, counsel and experts

Decided by

• Charlene Edwards Honeywell Judge, United States Court of Appeals for the Eleventh Circuit (District Judge, M.D. Fla., sitting by designation)

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Keywords

• effective vindication doctrine
• ERISA
• employee stock ownership plan
• ESOP
• plan-wide relief
• breach of fiduciary duty
• 29 U.S.C. § 1132(a)(2)
• 29 U.S.C. § 1109(a)
• class action waiver
• representative action
• motion to compel arbitration
• Federal Arbitration Act
• severability
• defined contribution plan
• Viking River Cruises
• Italian Colors
• Thole v. U.S. Bank
• A360

Summary generated with AI from the published documents — refer to the award for the authoritative text.